TANZANIAEXPERIENCE: ISSUES, CHALLENGES AND SUCCESSES ON PUBLIC PROCUREMENT SYSTEM

By Zitto Z. Kabwe, MPChairperson PAC, United Republic of Tanzania

Nairobi - Kenya, November 4th 2013

CONTENTS Reforms in the Public Procurement regime;

Success Stories in the Public Procurement;

Challenges in the Public Procurement system;

Solutions to Challenges

REFORMS IN PUBLIC PROCUREMENT REGIME

Procurement reforms in Tanzania started way back in 1997.

The reforms led to enactment of Public Procurement Act No. 3 in March 2001 (PPA 2001). It became operational in July 2001.

In 2002 a Country Procurement Review Assessment was carried out which suggested further reforms from centralized to decentralized procurement System

The Reforms culminated in enactment of Public Procurement Act 2004.

PPA N0.3 of 2001

PPA No. 21 of 2004

Central Tender Board

PPRA

Head of PEs

chairperson of

TB

Head of PEs not

chairperson of TB but

they appoint members

Not applicable

to Parastatals

not receiving

Gov. subvention

Applicable to all public

bodies including those not receiving

subvention

PPAA h

as

chairp

erson an

d

Four M

embers

PPAA h

as

chairp

erson an

d six

mem

bers

Procurement

Thresholds

No Procurem

ent

Thresholds

Major differences between PPA 2001 and PPA 2004

SUCCESS STORIES

1.The establishment of the Public Procurement Regulatory Authority (PPRA) in 2004.

SUCCESS STORIES

SUCCESS STORIES

SUCCESS STORIES

2. The enactment of Public Procurement Act of 2011 (PPA 2011).

- The integration of the procurement plan with budgeting process.

CHALLENGES

1. Procurement Management Challenges or Compliance Challenges

2. Economic Challenges

COMPLIANCE CHALLENGES

Procurement Management weaknesses highlighted in the 2011/2012 PPRA procurement audit report on the performance of Procuring Entities (PEs) and verified by the 2011/2012 CAG’s annual General report are;

i. Inappropriate establishment of Procurement Management Units; The audits revealed that the overall level of compliance on establishment and composition of PMUs was averaging 78% (56% in 2010/11) for MDAs. It has not reached 100%

COMPLIANCE CHALLENGES

ii. Inappropriate preparation of annual procurement plans; The overall average level of compliance on preparation and implementation of annual procurement plans was 58%. The average level of compliance of 68% was assessed for MDAs in year 2011/12 (54% in 2010/2011).

iii. Poor records keeping; The audits revealed that the overall level of compliance on records keeping was 63%. The average level of compliance for MDAs was 68%.

COMPLIANCE CHALLENGES

iv . Weak contract management; The audit results indicated average levels of compliance of 55% and 71% for quality control and contracts management respectively. The average levels of compliance for MDAs were 56% for quality control and 72%, for contracts management (64% and 41% in 2010/11).

v. Failure to publish contract awardsThe current audits have revealed that the overall level of compliance on publication of contract awards was 65%. The average level of compliance for MDAs was 65%.

COMPLIANCE CHALLENGESLow levels of Compliance

39%

50%55%

73%68%

49%

59%

69%

80%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

2006/07 2007/08 2008/09 2009/10 2010/11

AV

ER

AG

E C

OM

PLI

AN

CE

LE

VE

LS

ACTUAL TARGET

TREND OF PROCURING ENTITIES COMPLIANCE WITH PUBLIC PROCUREMENT ACT AND ITS REGULATIONS

SINCE FINANCIAL YEAR 2006/07

ECONOMIC CHALLENGES1. High Government expenditure in Procurement

ECONOMIC CHALLENGES

ECONOMIC CHALLENGES

ECONOMIC CHALLENGES

ECONOMIC CHALLENGES2. Gap between Government expenditure and

revenue collection

ECONOMIC CHALLENGES

3. Corruption in public procurement.

NOTE:

“ The worse thing than spending money you don’t

have is buying wrong things in a wrong way”

ECONOMIC CHALLENGESThe 2009 National Governance and Corruption Survey conducted by PCCB reported the following;

SOLUTIONS TO COMPLIANCE CHALLENGES

Accounting Officers, Tender Boards Chairpersons and Heads of PMUs of the PEs with poor performance to be summoned before the Board of Directors of PPRA to give explanations on the reasons for poor performance and to strategize on measures to be taken to redress the situation .

PEs with poor and fair performance to be required to organize training to their staff on the application of PPA and Regulations made under it.

SOLUTIONS TO COMPLIANCE CHALLENGES

On the weaknesses on contracts management, all entities with poor performance on indicators for contracts management and quality control should be included in the list of entities to be audited in the next value for money audits in order to assess critically the extent, sources and causes of the identified weaknesses and thereafter recommend corrective measures.

SOLUTIONS TO ECONOMIC CHALLENGES

The enforcement of the Public Procurement Act of 2011

Putting in place a system of ensuring capable bidder are getting tenders

Keep fighting against Corruption

Thank you for Thank you for listeninglistening

The EndThe End